This is a follow-up update regarding the Nera litigation-funding portfolio on Mintos. For background information about the payment delays, the structure of the Notes, and details of the ongoing SRA review, please refer to our previous update from June 2, 2026.
Since our last communication, no principal repayments have been received. However, discussions with Nera Capital Ltd and other significant funders on a restructuring path have progressed. We are now in the final stages of negotiating a restructuring term sheet. Documentation has not yet been finalized; we will share further details once the restructuring arrangement has been formally agreed and implemented.
As for the Solicitors Regulation Authority (SRA) review, there have been no material developments since our previous update. However, the proposed restructuring is also intended to address the concerns raised by the Solicitors Regulation Authority (SRA), which remains an important consideration in the ongoing discussions.
We would also like to inform investors that a previously identified issue affecting payment status displays on the Mintos platform remains. The issue was caused by incorrect repayment data received from Nera Capital Funding DAC 2 through an API integration, which resulted in some payments being incorrectly shown as "Paid" and moved to the Pending Payments section, when they should have remained classified as delayed until the 60-day buyback would happen. We are currently working on a solution to ensure that the payment status displayed on the Mintos platform accurately reflects the actual status of these investments and will provide further updates as progress is made.
Frequently asked investor questions
1. Does the buyback obligation apply, and when does it take effect?
Yes. The buyback obligation applies if a payment from the underlying borrower remains overdue for more than 60 days. After this 60-day period, Nera Capital Funding 2 DAC is required to repurchase the affected loans, and the amount moves to Pending Payments status on Mintos. From that point, Mintos-calculated Pending Payment Interest starts to accrue on the delayed amount. It is important to note that no late interest accrues during the initial 60-day overdue period. This is because the agreement with Nera Capital Funding 2 DAC does not provide for late interest before the buyback obligation is triggered. Other Lending Companies on Mintos may have different arrangements.
It is also important to understand that the buyback obligation does not mean that cash is immediately available for repayment. In the current circumstances, the underlying claims have not yet been resolved, and Nera Capital Funding 2 DAC may not have sufficient cash flows to make buyback payments until funds are received from the underlying recovery process.
In simple terms, the buyback obligation is triggered after 60 days of delay in repayment, and Pending Payment Interest begins to accrue, but actual repayment depends on when Nera Capital Funding 2 DAC receives recoveries from the underlying claims.
2. What is causing the delay in resolving the underlying claims?
The recovery process has been affected by an ongoing legal case that is expected to clarify whether certain consumer claims can be pursued collectively rather than individually.
A collective approach could make the claims process more efficient and reduce associated costs. While this legal matter is being resolved, progress on some individual claims has been slower than initially anticipated.
Based on current information, further clarity may emerge by the end of summer or during autumn 2026. However, the timeline depends on legal and regulatory processes that are outside the parties' control.
3. Can Nera Ltd use cash flows from non-UK operations to service obligations on Mintos?
No. Nera Capital Ltd has no contractual obligation to support Nera Capital Funding 2 DAC. Its role is to manage the underlying claims and recovery process, rather than to guarantee repayments.
At present, Nera Capital Ltd has not expressed any intention or proposal to voluntarily use its own funds or cash flows from other operations to cover Nera Capital Funding 2 DAC obligations.
4. Is SRA review a temporary administrative issue or a more serious concern?
Any review by an authority shall be taken seriously. We have been informed that the review is part of an industry-wide solvency review of legal firms, not any other wrongdoing. Nevertheless, it is up to the SRA to make its conclusion and potential resolution of the review.
5. Other litigation funders have said they are not affected by the SRA review. How can it be industry-wide?
The SRA review covers a defined set of UK law firms with high-volume consumer-claim caseloads, not the litigation finance sector as a whole. Other funders whose lending model or borrower base is different may not be affected. Our update reflects the situation specifically for the law firms funded through Nera Notes.
6. Is the SRA investigation limited to UK loans?
Yes. Based on current information, the regulatory review is limited to UK-related lending and litigation funding activities.
7. When will payments resume?
There is currently no defined timeline for payment resumption. Resumption of payments depends on the regulatory review being concluded and normal servicing being restored. This timing is uncertain.
8. Will principal not due yet be repaid on time when Notes mature?
Based on information provided by Nera Capital and the nature of litigation funding assets, there is a material likelihood that case resolutions will extend beyond original Nera Note maturities. This is a known structural characteristic of litigation finance, where recovery timing is dependent on court processes, settlements, and enforcement actions.
As a result, principal repayment at maturity cannot be guaranteed in the current circumstances and most likely will be delayed.
9. Can Nera Notes on Mintos be sold on the Secondary Market?
Yes. Investors can list and trade eligible Notes, i.e., Notes that are not in Pending Payments or overdue, on the Secondary Market, subject to standard platform liquidity and demand conditions.
10. Why is the overdue amount increasing?
Because scheduled repayments are currently not being received on time, amounts that would normally be repaid to investors remain outstanding and accumulate as overdue payments.
11. Do the missed payments mean the investments are lost?
No, currently, such a conclusion cannot be drawn. The delays to Note holders reflect delayed expected cash flows from the resolution of underlying claims and SRA review.
12. Is interest still being calculated on delayed payments?
Interest is not accrued during the initial borrower payment delay period of up to 60 days. Once the 60-day period elapses, the buyback obligation is triggered, and the loans move to Pending Payments status. From that point, interest on the delayed amount (Pending Payment Interest) starts accruing in accordance with the applicable agreements and remains payable together with the outstanding amount.
Final note
We understand that uncertainty and limited visibility can be frustrating, especially in an asset class where timing is inherently linked to legal and regulatory processes.
We will continue to work on the situation closely and provide updates as soon as new, substantial information becomes available or at a minimum every two weeks, even if there is nothing material to report. We will also post each update in the community thread.
For transparency and consistency, we will avoid speculation and focus on confirmed developments as they arise.